March 28, 2018 / 10:14 PM / 24 days ago

Tesla shareholder lawsuit against SolarCity deal set to proceed

(Reuters) - A class action lawsuit by Tesla Inc (TSLA.O) shareholders against the electric car maker’s chief executive, Elon Musk, and the company’s board over the SolarCity deal was set to proceed after a Delaware judge refused to dismiss it.

FILE PHOTO: Elon Musk, Chairman of SolarCity and CEO of Tesla Motors, speaks at SolarCity's Inside Energy Summit in Manhattan, New York October 2, 2015. REUTERS/Rashid Umar Abbasi/File Photo

Tesla agreed to buy solar panel installer SolarCity for $2.6 billion in an all-stock deal in 2016.

Musk was the biggest shareholder in both Tesla and SolarCity at that time, and his SolarCity shares were converted to $500 million of Tesla shares.

It is “conceivable that Musk, as a controlling stockholder, controlled the Tesla board” during the SolarCity deal, the judge commented.

The lawsuit alleged that the board breached its duties to shareholders in approving the SolarCity deal.

    Reporting by Nivedita Balu in Bengaluru; Editing by Sriraj Kalluvila

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